No worries, I remember reading articles I think in 2011-12 about China beginning to trade with countries like Russia, Japan and India in their own currencies. This was one of the first signals that China was planning to make a move. Since then things have really started to heat up, the US has added trillions in new debt at record low interest rates with no signs of slowing, creditor nations like China and Japan have slowed and almost halted their purchases of US treasuries. So who is paying for all this ever increasing US spending? A small bunch of nations, Luxembourg, Belgium, Netherlands and Ireland have been buying over the last few years (quite dubiously), but the bulk is the FED. What will happen once interest rates rise on $20+ trillion of debt?
I don't see this happening overnight, China are playing the long game here, I see a long and drawn out scenario where a bi-polar reserve currency system splits the world in similar in fashion to the Cold War. But this time, China is not the USSR, there is no Iron Curtain, there is much less emphasis on our ideology vs theirs. Even nations with US bases will begin to (and some already have) hold small reserves of Yuan as China puts pressure on trade partners to use Yuan.
The biggest piece of this jigsaw puzzle for China is Saudi Arabia, who they are 'compelling' to take payment for oil in Yuan, essentially creating the 'Petro-Yuan'. Another note of interest is that the Deutsche Bundesbank have signaled they will also hold Yuan in their reserves. There is still a long way to go but it is definitely starting to happen.
I have been following this currency-drama in China and the US as well for a few years.
Regarding the Yuan my opinion is as well that it is right now undervalued. But there are lots of bad debts as well in China... So not sure how this will end...
Saudi-Arabia I think will never accept the Yuan, because if they do they will loose the US-backing and might be declared a terrorist state. The last thing the house of Saud needs right now is loose the US as a backer...
Venezuela on the other side (i.e. the government there) has nothing to loose... that is why they try to do this attack. It will be interesting to see if they follow through...
Thanks for your great comments, really refreshing compared to the bot comments...
Haha thanks, I am new here and will soon be starting to write some of my own posts with my own ideas and observations and try to look at things from an 'outside the box' perspective. Nothing right or wrong, just ideas and perspectives.
Absolutely agree on it being very hard for Saudi Arabia to accept the Yuan. I think a lot of things may be done 'under the table', until the Yuan is ready to take on a larger role, as of yet it still has a long way to go. Any nation in a similar position would be foolish not to at least make some kind of preparations, as Germany has publicly announced they are currently doing, even with a large US base on it's soil. Nothing lasts forever and that goes for the dollar also, I think by at least 2030 every nation will accept the Yuan in some amount, even if they are still using the dollar, if it's still around in its current form.
In light of what Venezuela is trying to do I'm going to be writing a piece about the top candidates around the world with rampant inflation who might also wish to follow in their footsteps.